Proposed SGR Doc Fix – It’s Different This Time

Evan Steele shares how the SGR Doc Fix will create a new MIPS payment system that would rely heavily on quality measurement, data sharing, and interoperability.

Year after year, physicians live for months with the uncertainty and angst of threatened, often draconian, Medicare reimbursement cuts born out of the Sustainable Growth Rate (SGR) budgeting formula. And every year, intense lobbying and complex negotiations lead to short-term patches that maintain or slightly increase reimbursement rates—these solutions are commonly referred to as the Doc Fix. This year’s fix is set to expire at the end of March, which would leave physicians facing a 23.7% reduction—but on Thursday, a bipartisan piece of legislation proposed a repeal of the SGR and the creation of a new payment model that would reward quality, rather than volume of care provided. All that’s left now is to figure out how to fund the $128 billion price tag over the next 10 years.

Although I haven’t read the 200-page bill, the following is a summary of its major provisions:

The SGR fix would increase Medicare physician reimbursement rates by 0.5% annually for the next 5 years, i.e., through 2018. This would provide income predictability and stability for providers.

2018 rates would be maintained through 2023.

From 2024 on, physicians who participate in Alternate Payment Models would see a 1% annual increase; non-participants would receive 0.5% increases.

It would create a new payment system called MIPS (Merit-Based Incentive Payment System) by 2018, which would roll up meaningful use, PQRS, and the Value-Based Payment System into one program that would tie physician reimbursement to quality and cost. Physicians would be assessed in 4 areas:

Quality: based on current and future quality measures from the PQRS and Meaningful Use programs

Resource use: assessment of cost structure using a method similar to that currently in use in the Value-Based Payment Program

Meaningful Use: satisfying current meaningful use requirements demonstrated by use of a certified EHR

Participation in practice improvement activities: a new area of measurement related to clinical improvement.

Physicians would receive a composite score on all of the above. Based on total score relative to other physicians, they would receive either:

A negative adjustment of up to 4% in 2018, 5% in 2019, 7% in 2020, and 9% in 2021

No adjustment

A positive adjustment of as much as 3 times the maximum negative adjustment for that year.

The new payment system would provide additional incentives (5% per year from 2018 to 2023) to providers who derive a substantial part of their income from alternative payment models that base payment on quality assessment and financial risk sharing rather than volume of services provided, (e.g., ACOs, Medical Homes, or other new healthcare delivery models).

It would encourage cost savings by incentivizing care coordination and adherence to Clinical Decision Support (CDS) mechanisms and Appropriate Use Criteria (AUC) aimed at reducing unnecessary testing—specifically in the area of advanced diagnostic imaging:

Effective 2017, physicians would be paid for advanced diagnostic imaging only if the claim shows consultation with CDS mechanisms and AUC.

Effective 2020, the 5% of physicians with the lowest adherence rates would require prior authorization for such tests.

Beginning in 2015, patients would have access to quality and cost data regarding individual physicians that would be made available on the Physician Compare Site.

MIPS would rely heavily on quality measurement, data sharing, and interoperability, so one thing is abundantly clear: Robust EHRs and extensive data management capabilities will be critical tools for physician success in the future, even more so than they are today.

Evan Steele writes about his observations and opinions on the countless complexities that are challenging everyone in the health care industry on his site, EMR Straight Talk where this was first posted.